Is There a Financial Advantage to Manual Transmission Cars?

From the time the first cars were mass produced at the turn of the twentieth century until the 1940s, manual transmissions, commonly called stick shifts, were the only kind you could buy. And until the 1990s, they remained a popular choice for car buyers—especially those looking for a less expensive vehicle. But is that still true?

Purchase Price

In general, manuals are less expensive to buy new, although there are a few brands that charge more for models with manual transmissions. There are even some who have stopped making them across their product lineup altogether, like Acura, Lexus, and Volvo. A few brands are down to only one model, and often it’s their luxury sports car, where price may not be a large factor for buyers.

Many car manufacturers find these days it’s cheaper to make only automatic transmission instead of having to produce two different drive trains.

Fuel Efficiency

Manual transmissions used to be more fuel efficient, consuming 5-15% less fuel than a similar automatic transmission car. Back in the ‘80s, you could save hundreds of dollars a year if you drove a stick. And if you drove that car for several years, you’d easily see savings in the thousands of dollars.

But automatic transmission technology has advanced. Comparing the EPA estimated gas mileage between a 2018 Ford Fiesta automatic transmission and its manual transmission counterpart, it turns out the automatic has slightly better highway mpg (miles per gallon). It’s not as great a difference as when the manual was more efficient, but it’s enough to eliminate this as a financial reason to choose a manual over an automatic.

Repairs

If often driven in slow-moving, bumper-to-bumper traffic, a manual transmission car can incur increased repair bills due to clutch damage. If the driver isn’t efficient at operating a manual—accelerating and shifting late or early—the transmission will wear out early. And replacing a transmission is never a cheap bill. On the other hand, manual transmission vehicles can be overall cheaper to repair (when it doesn’t involve replacing the transmission) because they’re less complex than automatics, which have more parts that can fail.

Car Insurance

Insurance companies can rate a manual as having a higher risk of loss (i.e. who’s at fault and pays out in an accident), which increases premiums, because of the longer time to shift, accelerate, and stop. This consideration also includes the increased amount of attention required by drivers to safely operate a stick shift. However, there is a chance an insurance company will consider a stick shift a lower risk because they have historically cost less to replace. With more and more car companies halting production of manuals, though, this may no longer be true of most insurance policies.

Trade-in Value

This is where buying the less expensive manual model of a car may end up costing you. You likely won’t be able to sell or trade in the manual for the same amount as an automatic because the market for manual transmissions is drastically shrinking. So you might have to take a bigger hit selling it than you saved buying it. Especially with manuals accounting for less than 3% of vehicles sold. The exception might be for very high-end sports cars.

Travel

The one place you can still depend on a cheaper price tag for a stick shift is abroad, on practically every continent. Being able to drive a stick can save you a pretty penny if you plan on renting a car in a foreign country, and they’re usually still more fuel efficient.